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Stitch Fix

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Stitch Fix, Inc.
Company typePublic
Nasdaq: SFIX (Class A)
Russell 2000 Index component
IndustryRetail
FoundedFebruary 2011; 13 years ago (2011-02)
FoundersKatrina Lake
Erin Morrison Flynn
Headquarters
San Francisco, California
,
U.S.
Key people
Katrina Lake, CEO
ServicesStyling
RevenueUS$ 1.66 billion (2019)[1]
US$ 726.5 million (2019)[1]
Total assetsUS$ 616 million (2019)[1]
OwnersKatrina Lake (16.6%)[2]
Websitestitchfix.com

Stitch Fix is an online personal styling service in the United States. It uses recommendation algorithms and data science to personalize clothing items based on size, budget and style. The company was founded in 2011 and had an initial public offering in 2017 with a valuation of $1.6 billion.[3] Stitch Fix generated more than $1 billion in sales during 2018 and reported 3.4 million customers in June 2020.[4][5] It is headquartered in San Francisco, California and employs 8,000 people worldwide.[6]

History

Stitch Fix delivery box

Stitch Fix was founded in 2011 by Katrina Lake and former J.Crew buyer Erin Morrison Flynn.[7][8][9] The business was originally called Rack Habit, and was initially run out of Lake's apartment in Cambridge, Massachusetts.[10][11] The company began by catering only to women, but it has subsequently expanded to men's clothing, plus sizes, maternity wear, and kids.[10]

In 2014, Stitch Fix started to be profitable. In July 2016, the company ended its fiscal year with recorded sales of $730 million, and in May 2017, the company had raised $42 million from outside investors.[10]

In November 2017, the company went public on NASDAQ. It was the first female-led company to launch an IPO in over a year.[12]

In October 2018, several class action lawsuits were brought against Stitch Fix alleging that the company had violated federal securities laws by making misleading statements about its growth prospects.[13]

As of 2019, the company had 8,000 employees including 5,100 stylists and more than 100 data scientists.[14][15]

On June 2, 2020, the company announced layoffs for 1,400 employees, which was 18% of its total workforce, all of whom are remote workers in California. The affected employees were given the option of remaining with the company if they relocate.[16] The online retailer also announced it will hire roughly 2,000 stylists in cities that have a lower cost of living than those in California such as Austin, Cleveland, Dallas, Minneapolis and Pittsburgh.[17]

Service

Stitch Fix is a personal styling service that sends individually picked clothing and accessories items for a one-time styling fee. Customers fill out a survey online about their style preferences. A stylist at the company picks five items to send to the customer. Stylists pick items based on a customer's survey answers and any access the customer gives them to their social media outlets. The customer schedules a date to receive their items, which is referred to as a "Fix". Once the shipment is received, the customer has three days to choose to keep the items or return some or all of them. If the customer keeps at least one item, the initial styling fee is credited towards the cost of the item. In addition to the styling fee being credited, if the customer decides to keep all five items, the customer receives 25% off the total cost of the items. Customers choose the shipping frequency, such as every two weeks, once a month, or every two months. The company also supports integration with Pinterest boards, allowing customers to add photos of fashion looks that they like. These boards may be viewed by a Stitch Fix stylist.[18][19]

The company uses data science and has combined personal stylists and machine learning (AI) for personalized recommendation.[20][21][22]

Media

Stitch Fix was referenced in a Wired article about recommendation algorithms, data science and astrophysics in Silicon Valley.[23] Wired also highlighted a new feature known as "Shop Your Looks," which suggests items matched to those previously purchased by customers.[14] Fast Company profiled the company and called attention to "its data prowess across every aspect of its business to reinvent the $334 billion U.S. apparel industry." It was recognized as one of the "50 Most Innovative Companies" for 2019.[24] Stitch Fix hosted a Golden Globes-like red carpet event in the 59 St-Columbus Circle subway station in New York City and had a 60-second spot before the 2019 Academy Awards.[25][26]

References

  1. ^ a b c [1]
  2. ^ Hirsch, Lauren Thomas, Lauren (17 November 2017). "Stitch Fix shares retreat after IPO pop, close at $15.15".{{cite web}}: CS1 maint: multiple names: authors list (link)
  3. ^ Debter, Lauren. "Stitch Fix Shares Pop In IPO, With Retailer Raising $120 Million". Forbes. Retrieved 2020-04-23.
  4. ^ "Stitch Fix founder Katrina Lake on shaking up the retail apparel industry". ABC News. Retrieved 2020-04-23.
  5. ^ Thomas, Lauren. "Stitch Fix sales fell 9% as coronavirus delayed orders, sees sales growth ahead as backlog clears". CNBC. Retrieved 25 June 2020.
  6. ^ "Stitch Fix Tests New Ways To Generate Revenue". Fortune. Retrieved 2020-04-23.
  7. ^ Griswold, Alison (April 7, 2014). "Are You There, Margaret? It's Me, Ali". Slate.
  8. ^ Hull, Dana (March 14, 2014). "Q&A: Stitch Fix founder Katrina Lake, on melding fashion and technology". San Jose Mercury.
  9. ^ Sanders, Lorraine (July 11, 2014). "A new shopping 'fix' - themed packages of products". San Francisco Chronicle.
  10. ^ a b c Merced, Michael J. De La; Benner, Katie (2017-05-10). "As Department Stores Close, Stitch Fix Expands Online". The New York Times. ISSN 0362-4331. Retrieved 2017-05-10.
  11. ^ "Why Stitch Fix and Its CEO Stand Out in Silicon Valley". Time. Retrieved 2018-06-17.
  12. ^ "Stitch Fix Goes Public Marketing The First Tech IPO Led By a Woman This Year". Washington Post. November 17, 2017.
  13. ^ "Stitch Fix hit with flurry of lawsuits over growth claims". Retail Dive. Retrieved 2018-10-19.
  14. ^ a b "Need Some Fashion Advice? Just Ask the Algorithm". Retrieved 2020-04-23.
  15. ^ "The personal stylists who are training the bots to be personal stylists". Retrieved 2020-04-23.
  16. ^ Canales, Katie. "Online clothing retailer Stitch Fix is laying off 1,400 California employees and instead hiring in lower-cost cities like Austin and Minneapolis". businessinsider.com. Retrieved 3 June 2020.{{cite web}}: CS1 maint: url-status (link)
  17. ^ Kolodny, Lora. "Stitch Fix is laying off 1,400 employees in California, and plans to hire in lower-cost U.S. cities". cnbc.com. Retrieved 3 June 2020.
  18. ^ Peterson, Hayley (March 12, 2015). "This hot fashion startup eliminates the hardest part of shopping". Business Insider.
  19. ^ Ciambriello, Roo (August 1, 2014). "Why Did These $68 Shorts From Stitch Fix Show Up With a $24.97 Price Tag From Nordstrom Rack?". Adweek.
  20. ^ "Stitch Fix Uses Machine Learning to Augment the Human Touch".
  21. ^ "By Humanizing Brands With AI, Common Marketing Issues Will Cease".
  22. ^ "Stitch Fix: The Amazing Use Case Of Using Artificial Intelligence In Fashion Retail".
  23. ^ "The Style-Quantifying Astrophysicists of Silicon Valley".
  24. ^ "Stitch Fix's radical data-driven way to sell clothes–$1.2 billion last year–is reinventing retail". Retrieved 2020-04-23.
  25. ^ "Stitch Fix Set Up a Red Carpet for Real Guys in NYC". Retrieved 2020-04-23.
  26. ^ "Stitch Fix debuts new brand campaign on Oscars night". Retrieved 2020-04-23.
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